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Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Accumulated depreciation on this date was $10,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonda Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Required A Required B Debit $ 230,000 190,000 180,000 405,000 200,000 700,000 270,000 50,000 230,000 225,000 $ 2,680,000 Credit $ 500,000 75,000 150,000 500,000 525,000 850,000 80,000 $ 2,680,000 Snoopy Company Debit $ 75,000 80,000 100,000 0 100,000 200,000 150,000 10,000 60,000 30,000 $ 305,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20x9. Credit $ 30,000 35,000 85,000 200,000 155,000 300,000 0 $ 805,000 Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field.

Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Accumulated depreciation on this date was $10,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonda Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Required A Required B Debit $ 230,000 190,000 180,000 405,000 200,000 700,000 270,000 50,000 230,000 225,000 $ 2,680,000 Credit $ 500,000 75,000 150,000 500,000 525,000 850,000 80,000 $ 2,680,000 Snoopy Company Debit $ 75,000 80,000 100,000 0 100,000 200,000 150,000 10,000 60,000 30,000 $ 305,000 (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20x9. Credit $ 30,000 35,000 85,000 200,000 155,000 300,000 0 $ 805,000 Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Accumulated depreciation on this date was $10,000. Peanut uses the equity method t ed to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation. Accounts Payable Bonda Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Required A Required B View transaction list Journal entry worksheet < A Note: Enter debits before credits. Event 1 Record entry Required A Required B < No journal entry required. (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9. Record Peanut Company's 100% share of Snoopy Company's 20X9 income. View transaction list Journal entry worksheet Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. General Journal Event 2 B Clear entry Note: Enter debits before credits. Record entry Peanut Company Debit $ 230,000 190,000 180,000 405,000 $ 2,680,000 200,000 700,000 270,000 50,000 No journal entry required 230,000 225,000 General Journal Clear entry $500,000 75,000 150,000 500,000 525,000 850,000 80,000 $ 2,680,000 Credit Record Peanut Company's 100% share of Snoopy Company's 20X9 dividend. Debit Credit Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Debit Debit $ 75,000 Snoopy Company View general journal Credit 80,000 100,000 0 100,000 200,000 150,000 $ 805,000 View general Journal 10,000 60,000 30,000 $ 30,000 35,000 85,000 200,000 Credit 155,000 300,000 0 $ 805,000
Transcribed Image Text:Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Accumulated depreciation on this date was $10,000. Peanut uses the equity method t ed to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling and Administrative Expense Dividends Declared Accumulated Depreciation. Accounts Payable Bonda Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Required A Required B View transaction list Journal entry worksheet < A Note: Enter debits before credits. Event 1 Record entry Required A Required B < No journal entry required. (Assume the company prepares the optional Accumulated Depreciation Elimination Entry.) Required: a. Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. b. Prepare a consolidation worksheet for 20X9. Record Peanut Company's 100% share of Snoopy Company's 20X9 income. View transaction list Journal entry worksheet Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. General Journal Event 2 B Clear entry Note: Enter debits before credits. Record entry Peanut Company Debit $ 230,000 190,000 180,000 405,000 $ 2,680,000 200,000 700,000 270,000 50,000 No journal entry required 230,000 225,000 General Journal Clear entry $500,000 75,000 150,000 500,000 525,000 850,000 80,000 $ 2,680,000 Credit Record Peanut Company's 100% share of Snoopy Company's 20X9 dividend. Debit Credit Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 20X9. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Debit Debit $ 75,000 Snoopy Company View general journal Credit 80,000 100,000 0 100,000 200,000 150,000 $ 805,000 View general Journal 10,000 60,000 30,000 $ 30,000 35,000 85,000 200,000 Credit 155,000 300,000 0 $ 805,000
Income Statement Sales Less: Cost of goods sold Less: Depreciation expense Less: Selling and Administrative expense. Income from Snoopy Company Net income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory ← Investment in Snoopy Company E Land Buildings and Equipment Less: Accumulated depreciation Total Assets Liabilities and Equity Less: Cost of goods sold Less: Depreciation expense Less: Selling and Administrative expense Income from Snoopy Company Net income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Investment in Snoopy Company H Land P Buildings and Equipment Less: Accumulated depreciation Total Assets Liabilities and Equity Accounts payable Bonds payable Common stock Retained earnings Total Liabilities and Equity PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X9 Peanut Company S S $ $ $ $ $ Snoopy Company 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 S < Required A 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ Consolidation Entries Credit Debit 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ Required B > Consolidated 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 0
Transcribed Image Text:Income Statement Sales Less: Cost of goods sold Less: Depreciation expense Less: Selling and Administrative expense. Income from Snoopy Company Net income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory ← Investment in Snoopy Company E Land Buildings and Equipment Less: Accumulated depreciation Total Assets Liabilities and Equity Less: Cost of goods sold Less: Depreciation expense Less: Selling and Administrative expense Income from Snoopy Company Net income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Assets Cash Accounts receivable Inventory Investment in Snoopy Company H Land P Buildings and Equipment Less: Accumulated depreciation Total Assets Liabilities and Equity Accounts payable Bonds payable Common stock Retained earnings Total Liabilities and Equity PEANUT COMPANY AND SUBSIDIARY Consolidated Financial Statements Worksheet December 31, 20X9 Peanut Company S S $ $ $ $ $ Snoopy Company 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 S < Required A 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ Consolidation Entries Credit Debit 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ Required B > Consolidated 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 0
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